How much extra state pension do you get for deferring it?

Full answer

Deferring the State Pension can be an attractive option for people who continue working past State Pension age or who have other income to live on initially, since the increase is index-linked and guaranteed for life once it starts, unlike investment returns which carry risk. **The increase rate** For people reaching State Pension age from 6 April 2016 onwards (the New State Pension), deferring increases your eventual weekly pension by 1% for every 9 weeks you defer, which works out at just under 5.8% for a full 12 months of deferral. This increase is added to your weekly pension permanently once you claim, and continues to be uprated in line with the normal triple lock/annual increases thereafter. **No lump sum option for New State Pension** Under the OLD basic State Pension system (people reaching State Pension age before 6 April 2016), deferring gave a choice between a higher ongoing weekly pension or a one-off taxable lump sum reflecting the deferred payments plus interest. This lump sum option was removed for the New State Pension -- anyone reaching State Pension age from April 2016 onwards can only take the higher ongoing weekly amount, not a lump sum. **Deferral must be voluntary and continuous** You do not need to formally apply to defer -- if you simply do not claim your State Pension when you first become eligible, it is automatically treated as deferred, and the increase accrues for each period you do not claim. You can choose to start claiming at any point afterwards, at which point the accrued increase is calculated and permanently added to your pension rate. **Is deferring worth it? -- the break-even calculation** Whether deferring pays off financially depends heavily on how long you live after claiming -- deferring for a year to get a 5.8% higher pension for the rest of your life is a good deal if you live for many years afterwards, but if you die shortly after eventually claiming, you will have received less in total than if you had simply claimed on time and taken a lower amount for longer. As a rough guide, the "break-even point" for a one-year deferral is often in the region of 17-20 years of receiving the increased pension, though this varies with exact figures and any subsequent uprating. **Worked example** Someone entitled to the full New State Pension of £241.30 a week in 2026/27 decides to defer for exactly 2 years (104 weeks) while continuing to work. Their eventual weekly pension increases by roughly 11.6% (2 years x 5.8%), taking it to approximately £269.20 a week (before any further annual uprating that would apply on top regardless of deferral) -- an extra roughly £27.90 a week, or about £1,450 a year, for the rest of their life, guaranteed and index-linked, in exchange for having received no State Pension income at all during the 2 years of deferral. **Practical tip** Deferring is generally most attractive for people in good health with a reasonable family longevity history, who have other income to bridge the deferral period and do not urgently need the State Pension income immediately at State Pension age -- a benefits and pensions adviser or the government's Pension Wise service can help model whether deferral suits an individual's specific circumstances.

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